Business

LONDON — British energy giant Shell on Thursday unveiled record annual net profit of $42.3 billion thanks to surging oil and gas prices, sparking outrage from green groups and unions as the UK endures a cost-of-living crisis.

The post-tax figure, fuelled by the invasion of Ukraine by major energy producer Russia, was more than double the amount achieved in 2021, Shell's earnings statement revealed. 

Revenue rocketed 45 per cent to a dizzying $381 billion in 2022, mirroring huge gains by rivals.

Colossal profits for energy majors worldwide have sparked public fury as consumers see the cost of heating and lighting their homes and businesses rocket.

Environmental campaigner Greenpeace on Thursday protested outside Shell's London headquarters, arguing that the group is "profiteering from climate destruction".

The Trades Union Congress said an increased windfall tax could help fund wage rises for public sector workers currently locked in a wave of strikes in protests over pay that lags soaring inflation.

"Instead of holding down the pay of paramedics, teachers, firefighters and millions of other hard-pressed public servants, ministers should be making big oil and gas pay their fair share," said TUC General Secretary Paul Nowak.

Billions for shareholders 

Shell said it would return a further $4 billion to shareholders following huge buybacks already last year — and would significantly lift its dividend — following the record earnings.

"Our results in the fourth quarter and across the full year demonstrate the strength of Shell's differentiated portfolio, as well as our capacity to deliver vital energy to our customers in a volatile world," new Chief Executive Wael Sawan said in the results statement.

Shell is looking to reinvent itself under the company's former renewables boss Sawan, who replaced Ben van Beurden in the top seat at the start of the year.

Energy firms are under increasing pressure to step up efforts to transition away from fossil fuels as the world scrambles to become a net-zero emissions economy by 2050.

But Shell rival BP said Monday that while the transition could be accelerated by Russia's war in Ukraine, "oil continues to play a major role in the global energy system for the next 15-20 years".

The invasion a year ago of Ukraine by its neighbour Russia sent oil and gas prices rocketing.

Russia is a major producer of fossil fuels and the war resulted in slashed supplies.

Record US profits 

Shell's update comes two days after US energy major ExxonMobil reported an even bigger record profit of almost $56 billion, handing massive windfalls to shareholders.

This has caused US President Joe Biden to hit out at American energy giants, including Chevron, insisting they should be helping to reduce energy prices during a cost-of-living crisis. 

On Tuesday Biden tweeted that the only thing "stopping Big Oil from increasing production [and therefore lowering prices] is their decision to pay shareholders billions instead of reinvesting profits".

The president's intervention came after a White House spokesperson told the BBC that Exxon's record profits were "outrageous", especially after "the American people were forced to pay such high prices at the pump" in the wake of the Russian invasion of Ukraine.

In a bid to ease the pain for consumers, governments have introduced windfall taxes on the mammoth profits.

Shell has revealed that windfall taxes imposed by the European Union and UK following the surge in earnings would cost the group about $2 billion.

"Shell has once more flexed its financial muscles on a massive scale, while riding the waves of an economic cycle which can bring major challenges as well as rewards," said Richard Hunter, head of markets at Interactive Investor.

"The fluctuating opinions surrounding demand from China following its reopening will continue, and there could also be bumps in the road should even a mild global recession ensue."

MUMBAI — Shares in Gautam Adani's empire nosedived again on Wednesday as the Indian tycoon dropped off the Forbes top 10 rich list following allegations of massive accounting fraud.

The five-day rout has now wiped out around $92 billion of the value of the conglomerate's listed units, Bloomberg News said, while Adani's fortune has collapsed by more than $40 billion.

The share price of flagship firm Adani Enterprises suddenly dropped further on Wednesday afternoon, closing 28.45 per cent lower on the Mumbai stock exchange.

The trigger was news that Swiss banking giant Credit Suisse had stopped accepting Adani bonds as collateral for loans it advances to private banking clients, Bloomberg reported.

The slide in Adani's personal wealth on the real-time Forbes rich list meant that the school dropout billionaire was overtaken as Asia's richest man by fellow Indian Mukesh Ambani.

Adani Total Gas — in which French giant TotalEnergies owns 37.4 per cent — dropped another 10 per cent on Wednesday, forcing the Bombay Stock Exchange to suspend trade in the stock soon after the market's open.

Adani Ports dropped almost 18 per cent, while Adani Power and Adani Wilmar fell 5 per cent each.

The sudden sharp drop in Adani Enterprises came despite a $2.5 billion stock sale in the firm that concluded on Tuesday and was oversubscribed.

Smaller retail investors largely steered clear from the follow-on public offering, however, impeding Adani's plans to expand his shareholder base to include "the average, normal Indian mom and dad as shareholders".

Large buyers instead propped up the share sale, including fellow Indian tycoons Sajjan Jindal and Sunil Mittal, Bloomberg News reported, citing unidentified sources.

1,000 per cent 

Publicity-shy Adani, 60, has seen his empire expand at breakneck speed, with shares in Adani Enterprises soaring by more than a thousand per cent over the past five years.

This helped make him, as of last week, the world's third-richest man behind Elon Musk and Bernard Arnault and family.

According to US short-seller investment group Hindenburg Research, Adani has artificially boosted the share prices of its units by funnelling money into the stocks through offshore tax havens.

This "brazen stock manipulation and accounting fraud scheme" is "the largest con in corporate history", Hindenburg said in its explosive report issued last week.

Even before the report there were concerns that Adani had taken on too much debt.

Adani said it was the victim of a "maliciously mischievous" reputational attack and issued a 413-page statement on Sunday that said Hindenburg's claims were "nothing but a lie".

Hindenburg, which makes money by betting on stocks falling, said in response that Adani's statement failed to answer most of the questions raised in its report.

Opposition heckles 

Critics say Adani's close relationship with Prime Minister Narendra Modi has helped him win business and avoid proper regulatory oversight.

Modi, who like Adani is from Gujarat state, has not commented publicly since the Hindenburg claims, which analysts say has hurt India's image just as it seeks to woo overseas investors away from China.

The firm's many interests include ports — the firm took control of one of Israel's biggest this week — telecoms, airports, media and energy, both in coal and renewables.

India's opposition Congress party called this week for a "serious investigation" by the central bank and regulator into Adani's firms following the Hindenburg allegations.

"For all its posturing about black money, has the Modi government chosen to turn a blind eye towards illicit activities by its favourite business group?" Congress said.

Opposition lawmakers mockingly chanted "Adani! Adani" on Wednesday as Finance Minister Nirmala Sitharaman talked about ports during a budget speech.

WASHINGTON — Global growth is set to be higher than expected this year, the IMF said on Monday, raising its forecast on surprisingly strong consumption and investment while China's lifting of zero-COVID restrictions provides another boost.

World growth has been bogged down by fallout from Russia's invasion of Ukraine last year, economic downturns and efforts to rein in spiraling costs of living.

Against this backdrop, the International Monetary Fund expects the global economy to expand 2.9 per cent this year, slowing from 2022 to a rate that remains weak by historical standards.

But "adverse risks have moderated" since last October's forecast, said the IMF in the latest update to its World Economic Outlook report.

"The year ahead will still be challenging... but it could well represent a turning point with growth bottoming out and inflation declining," IMF chief economist Pierre-Olivier Gourinchas told reporters.

In particular, the IMF sees Germany and Italy avoiding recessions this year, shifting from earlier predictions, as European growth proved "more resilient than expected" despite shocks from war in Ukraine.

And the fund does not expect global GDP to shrink, with Gourinchas noting "We're well away from any sort of global recession marker."

While the outlook has not worsened this time around, there are still challenges to overcome to reach sustainable recovery, he said.

Surprising resilience 

Most advanced economies are expected to slow this year, driving the global growth decline, said the IMF. Yet, many countries have shown surprising resilience.

"The forecast of low growth in 2023 reflects the rise in central bank rates to fight inflation — especially in advanced economies — as well as the war in Ukraine," the IMF said.

But although US growth is projected to fall to 1.4 per cent in 2023 and euro area growth is set to slump to 0.7 per cent, both figures reflect upward revisions from last October.

"Economic growth proved surprisingly resilient in the third quarter of last year, with strong labour markets, robust household consumption, and also business investment," said Gourinchas.

Countries adapted better than expected to the energy crisis in Europe too, he added, with the region seeing lower-than-anticipated gas prices and having enough resources to make shortages unlikely this winter.

Inflation has shown signs of decreasing globally as well, and China's reopening holds the promise of a rapid rebound in the country's economic activity, Gourinchas said.

The world's second-biggest economy has in the past contributed up to 40 percent of global growth, IMF chief Kristalina Georgieva previously noted.

This year, its growth is pegged at 5.2 per cent — 0.8 points more than earlier expected — on "rapidly improving mobility" after it abruptly ended its zero-COVID policy in December.

But the United Kingdom saw a significant downgrade to its growth forecast, and is now seen to contract 0.6 per cent this year.

This comes as high energy prices hurt households and businesses, while tighter monetary policy weighs on economic activity.

'Not yet won' 

Despite a rosier outlook, the IMF warned of numerous risks on the horizon.

An escalation of war in Ukraine could impact food and energy prices, and China's recovery might stall on a deepening real estate crisis or severe Covid outbreaks — due to low population immunity and insufficient hospital capacity.

Stubborn inflation could also prompt further tightening by central banks and hold back business activity as borrowing costs rise.

"The fight against inflation is not yet won," Gourinchas said.

Overall inflation may have peaked, but the "core" calculation which strips out the volatile food and energy components remains well above pre-pandemic levels in most economies.

Even as tighter monetary policy starts to cool demand and lower inflation, the IMF warned its "full impact is unlikely to be realized before 2024."

There could be favorable surprises, such as if consumption remains solid or inflation falls without sparking a rise in unemployment.

But Gourinchas cautioned it is "premature to put too much weight on that sort of benign scenario" where prices cool on their own.

ABU DHABI — The fight against global warming should not be at the expense of economic growth, the UAE oil chief who will lead this year's UN climate talks said on Monday.

Sultan Al Jaber, the United Arab Emirates' special envoy for climate change and CEO of oil giant ADNOC, said the energy transition needed to make the planet "wealthier and healthier".

"We need to hold back the global rise in temperatures to 1.5 degrees [Celsius], without slowing economic growth," he told a graduation ceremony at the Mohamed Bin Zayed University of Artificial Intelligence.

"We need to drive an inclusive energy transition that leaves no one behind, especially in the Global South. We need to make our planet wealthier and healthier at the same time."

Al Jaber's appointment as president of COP28 in November and December has been criticised by activists who said it threatens the "legitimacy" of the global forum against climate change.

The minister of industry and advanced technology is a veteran of COP meetings and heads a leading renewable energy company. His appointment was welcomed by US climate envoy John Kerry.

The last UN climate talks, held in Egypt in November, ended with a landmark deal to create a "loss and damage" fund to cover the costs that developing countries face from climate-linked natural disasters and slower impacts like sea level rise.

But observers were left disappointed that little progress had been made on reducing planet-heating emissions from fossil fuels.

The UAE, one of the world's biggest oil producers, argues that crude remains indispensable to the global economy and is needed to finance the energy transition. 

The Gulf monarchy is pushing the merits of carbon capture — removing carbon dioxide as fuel is burned, or from the air.

It is also spending billions to develop enough renewable energy to cover half of its needs by 2050, and is targeting net-zero domestic carbon emissions by that year — which does not include pollution from the oil it exports.

Earlier this month, the United Nations climate chief Simon Stiell told AFP that Al Jaber had expressed "an openness to make this a transformative COP".

The UAE'S hosting of COP is also an opportunity to ask "hard questions" about climate change and the hydrocarbons industry, he added.

KHARTOUM — As Sudan's economic crisis drags on, grocer Hassan Omar keeps busy cleaning packaged food items that have been gathering dust for months as his dwindling customer base make fewer purchases.

"People can no longer afford to buy all their needs," Omar, 43, told AFP at his grocery store in the capital Khartoum.

"Purchasing power has significantly declined over the past six months," he said, noting that his sales had plummeted from 500,000 Sudanese pounds ($877) to 200,000 pounds ($350) per day over that period. 

His plight reflects Sudan's spiralling economic crisis which has forced many households to tighten their belts as nearly one third of the 45 million population face acute hunger.

Some 65 per cent of the population live below the poverty line, according to a 2020 report by the United Nations.

The country's economic troubles stem from decades of government mismanagement, armed conflict and international sanctions against the government of president Omar Al-Bashir, who was ousted in April 2019 following mass protests against his rule triggered by biting hardship.

The crisis further deepened following a 2021 military coup led by army chief Abdel Fattah Al Burhan, which upended a transition to civilian rule and triggered cuts to crucial international aid.

"We are trying to find cheaper alternatives to the food we normally consume," said Soaad Bashir, a government employee and mother of four.

"My income is very low and expenses are too high," said the 43-year-old who makes less than 200,000 Sudanese pounds per month.

'Complete recession' 

North Khartoum vegetable seller Al Nour Adam says he has suffered heavy losses over the past nine months.

"Much of the produce spoilt because no one was buying it," said Adam, who now offers a smaller range of vegetables in an attempt to cut his losses.

"It can't go on like this or I will have to find another job."

Inflation in Sudan has eased over the past year, falling to 87 per cent in December from 318 per cent in the same month of 2021 but analysts say that is not a sign of the economy improving.

"Inflation has simply declined because market activity has for months been at a standstill," said Abdalla Al-Ramady, economics professor at Al Nilin University. 

"There is no demand, so prices of commodities are not going up. It's a complete recession."

Grocer Omar confirmed he had not raised his prices in months. 

The economic crisis has hit wide sections of Sudanese society not just the poor.

In recent weeks, hundreds of students staged protests over increases to university fees. 

"I was asked to pay 550,000 pounds [$964] and my family cannot afford to pay," said Mohamed Hussein, a first-year engineering student, noting that fees had last year stood at around 50,000 pounds ($87). 

Meanwhile, hundreds of Sudanese professors have been on an open-ended strike since January 10 to protest low salaries.

Hopes for stability 

Fees for other government services from issuing passports to road tolls have also gone up. 

"Road toll fees increased by five times at least compared to last year," said freight haulier Tigani Omar. 

"It will increase the cost of transport and will eventually reflect on all products."

Despite scepticism about the prospects for a political breakthrough, some still hope that a deal between Sudan's military rulers and civilian leaders could turn the economy around. 

In December, the two sides signed a preliminary deal aimed at restoring the transition to civilian rule interrupted by Burhan's coup. Critics have said the accord is "vague" and "opaque". 

But Abdelhalim Hafez, a private sector employee and breadwinner for his family of six, hopes the deal could see the resumption of a family support programme which was suspended after the coup.

"I lost the little help that programme provided me," said Hafez who was haggling with a fruit vendor in Khartoum. 

"It may all improve if this deal manages to bring political stability."

Bashir agrees but does not expect it to happen soon.

"It will take years for the situation to improve," she said. 

AMMAN — Arab Bank Group achieved “solid results” for the period ending December 31, 2022, with net income after tax of $544.3 million as compared to $314.5 million in 2021. 

The Group’s performance was driven by robust growth in itscorebanking business across different markets, as net profit before provisions and tax increased by 23 per cent to reach $1.35 billion, according to an Arab Bank statement.

Excluding the impact of devaluation of several currencies against the US dollar, loans and deposits grew by 5 per cent to reach $35.4 billion and $47.7 billion, respectively, despite the volatile operating environment.

In view of these results, the Board of Directors has recommended to the shareholders, the distribution of 25 per cent cash dividends for the financial year 2022.

Sabih Masri, Chairman of the Board of Directors, commented that Arab Bank was able to achieve several key strategic objectives in 2022 despite the challenges that emerged during the year. 

He also added that the results reflect the bank’s “unique footprint” as well as its diversified franchise and rooted presence in several markets. 

Masri stated that the bank remains committed to its strategic sustainable growth direction centred on serving customers’ evolving needs, and continuing to invest in innovation and digital transformation.

Randa Sadik, chief executive officer, stated that Arab Bank continued to deliver sustainable growth rates during 2022 despite the economic challenges stemming from high inflation, increased interest rates and the devaluation in exchange rates of severalcurrencies against the US dollar. 

The bank’s net operating profit grew by 23 per cent driven by the growth in revenues from its core banking business, its diversified sources of income, with focus on non-interest income, as well as controlling operating expenses in line with the bank's prudent strategy.

Sadik added that the Group’s liquidity and asset quality remains solid where loan-to-deposit ratio stood at 74.2 per cent and credit provisions held against non-performing loans continue to exceed 100 per cent. Arab Bank Group maintains a strong capital base that is predominantly composed of common equity with a capital adequacy ratio of 16.6 per cent.

Sadik also highlighted that as part of Arab Bank’s commitment towards Sustainability and its Environmental, Social and Governance (ESG) priorities, the bank has launched its inaugural Sustainable Finance Framework, in line with international principles, guidelines and best practices. 

Arab Bank is the first bank in Jordan to adopt such a Framework and the bank has obtained a Second Party Opinion from S&P Global Ratings, which has affirmed the Framework’s alignment with the related international principles, the statement said.

With regard to the bank's digital transformation efforts, Sadik stated that the bank continues to implement its ambitious strategy on this front, noting that during the year the bank launched several digital banking services and solutions across various markets to meet the evolving needs and expectations of the different customer segments, including youth, in line with the latest trends and developments.

Arab Bank was named “Best Bank in the Middle East 2022” for the seventh consecutive year by New York-based international publication “Global Finance”. The bank also received several awards in recognition of its corporate and consumer digital banking services in Jordan and across the MENA region.

The 2022 financial statements are subject to the approval of the Central Bank of Jordan.

BAGHDAD — The sewing machines and fabric that surround Alaa Adel at her "Iraqcouture" studio in Baghdad are testament to her success in deeply patriarchal Iraq.

Adel, 33, counts herself among a limited number of female entrepreneurs in a country where most women don't work outside the home.

"We have a social tradition that prevents many women from working," Adel said at her studio in Baghdad's Karrada commercial district.

Even for those who do, "it is not always that easy", she added.

The International Organisation for Migration said in an October report that "prevailing customs and traditions... limit women's activities to their domestic and nurturing role".

Adel said such prejudices, as well as practical difficulties, posed a challenge to fulfilling her dream.

A graduate of the University of Baghdad who specialised in fashion and design, Adel wanted to create her own fashion house.

"I went to see the patrons of organisations that support art and culture. But my idea was systematically rejected because I had no experience in the conception of projects," she said.

Thanks to an Iraqi foundation, The Station, and its "Raidat" (Female Entrepreneurs) programme financed by the French embassy in Baghdad, Adel got training which, she said, gave her the confidence to start her own business.

Obstacles

Iraq's private sector is still embryonic, making more tedious and lengthy the steps to set up a company.

The country, which is trying to move past four decades of war and unrest, is also plagued by endemic corruption, widespread unemployment and a poverty rate of around 30 percent.

Almost 38 per cent of people with jobs work in Iraq's public sector — one of the highest rates in the world, according to the International Labour Organisation (ILO).

Adel eventually secured a loan from a private bank, and created her "Alaa Adel" brand last summer.

At the beginning, she had to deal with sexism from some fabric suppliers who were reluctant to do business with a woman, she said.

Then there was a lack of public childcare facilities, in a country where tradition says children should be taken care of at home — by the mother — until they go to school.

Adel got help from family members who look after her two boys, aged nine and four, while she is at work.

'Complicated' 

Iraq has 13 million employment-aged women "yet only around one million are working", said ILO country coordinator Maha Kattaa, presenting a report in July last year.

The female labour force participation rate "was particularly low" at 10.6 per cent, the ILO report said, compared with 68 per cent for men.

In contrast, neighbouring Saudi Arabia — until a few years ago one of the world's most restrictive countries for women — had a female workforce participation rate of 35.6 per cent in the second quarter of 2022.

Most of Iraq's working women are teachers or nurses. A rare few are members of the police or armed forces.

For Shumoos Ghanem, men "dominate numerous sectors whereas women are relegated to the margins".

The 34-year-old is the owner of a dietary food business and founder of the Iraqi Women in Business initiative, which provides professional guidance to women online. She is also a mother to a 14-month-old son.

Ghanem says most of those she advises are mothers who have been out of the workforce and "wonder if society will accept them" again as working women.

Over the past five or six years, Iraqi women have had increased opportunities, she said, but the space for them "to develop is very limited still".

"Some regions are more traditional than others," she added, which further restricts women's chances to have "careers or to open projects".

Surrounded by men, Ghanem said she herself experienced sexism and was worried about harassment.

"When I went to see suppliers for the first time, I really saw how complicated it was," she recalled.

Now she works from home, but she too has a dream — to have her own health-conscious restaurant where she can help bolster the ranks of female Iraqi businesswomen.

"I want to make it a place to support women who want to work in this sector," she said.